more fake valuations

On the 31% of unicorns that are worth exactly $1B, partner at Lightspeed Venture Partners Jeremy Liew wryly noted (via this tweet) that it’s “potentially not a coincidence.”

Unicorn founders talk openly to the media about their desire to get the $1B valuation, as it helps attract talent, media, etc. The cynical and basic talent calculation that they’re making here is that employees don’t understand options and so will be smitten with a headline valuation without knowing what it actually means.

And, candidly, they’re probably right.

There is an adage in VC land — “You set the valuation, I set the terms.”

This is what is happening to get that exact $1B valuation. Even if the fundamentals don’t justify the $1B valuation, the investors can lay on enough structure and terms to get the founders to a $1B headline valuation (while investors have the protections they need).

With the $1B valuation, founders get:

• desired media exposure to attract talent
• bro-grats tweets
• conference speaking gigs
• a place on this list

And investors get enough downside protection to make $1B palatable.

Perversely, the terms and structure on these deals most negatively impact common shareholders (employees) when things don’t continue up and to the right. In these exit situations, common shareholders, aka employees, get fleeced.

TL;DR — Employees should do their diligence on unicorns so they are able to distinguish marketing value from real value.

Also a worthwhile warning from Antonio Garcia Martinez.

From CrowdStrike’s $6.7B public offering to Cisco’s massive purchase of Duo Security last year, cybersecurity startup exits have been on a tear.

We map out every $1B+ cybersecurity exit since 2010 — check them out here.

Fit as a fiddle

We identified 150 of the most promising private digital health startups looking to transform the healthcare industry.

These companies are working in areas ranging from imaging to clinical tools to genomics, and more. See them all here.

Amazon has set its sights on drone delivery for years.

Now, a recently granted patent points towards the e-commerce giant adopting a modular design that can be outfitted with sensors, batteries, lights, speakers, and more.

We dig into the patent, and why it matters, here.

Big news

After four great years in NYC, Future of Fintech is moving to San Francisco (June 14-16, 2020).

Here’s a preview of what to expect (more in the next few weeks):

• 3 main stages featuring content on fintech, wealthtech, and insurtech
• 75+ fireside chats with the biggest names in financial services
• 2,500+ senior level attendees from the largest financial institutions, most disruptive fintech startups, and most active fintech investors
• 50+ startup demos, including many from our famed Fintech 250 list
• 7,500 1:1 meetings
• 25,000 square-foot expo tent (yes, a tent)
• 200+ journalists from around the world
• 45+ countries represented by attendees from across the globe

Get your tickets now at a low special flat rate of $1595 (less than 50 tickets available). Prices will go up October 15, so act fast.

The rise of IoT sensors is set to cause a big jump in the amount of data being produced — creating new challenges in how it’s managed.

From collection to security to analytics, Expert Intelligence clients can see 120+ startups looking to improve the data life cycle.

CNN. Sherisse Pham (@Sherisse) writes about the US government’s blacklisting of a number of China-based AI companies and cites CB Insights data.

ZDNet. Greg Nichols (@gcnichs) discusses how driving will change in the next decade and highlights our report on the future of the in-vehicle experience.

Nikkei Asian Review. Coco Liu (@cocojournalist), Cheng Ting-Fang, and Lauly Li comment on the possible effects of the US government’s move to blacklist China-based AI companies and cites CB Insights research.

I love you.

Anand
@asanwal

P.S. We’re hiring a VP of revenue operations. Learn more about the job here.

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